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Banks Must Ditch Legacy IT
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Mike_Acker
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Mike_Acker,
User Rank: Apprentice
4/21/2013 | 11:23:23 AM
re: Banks Must Ditch Legacy IT
="why spend millions of dollars overhauling an existing system"

as Bruce Schneier has pointed out: we won't see any improvement until there is a financial incentive. This means extending product liability law to the banks,-- AND to the O/S software OEM.

It isn't right to hold a bank liable for a fraudulent EFT made by an infected endpoint computer.

The correction then involves locking and certifying the ENDPOINT computer systems. Until people get ready to do this the Happy Hacker will continue
RoadTrip2011
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RoadTrip2011,
User Rank: Apprentice
4/20/2013 | 4:30:09 AM
re: Banks Must Ditch Legacy IT
I'm a recent hire at a top ten US bank. If they got the most modern system in the world it would be legacy as soon as this IT dept got their hands on it. The Java apps created by the developers are tightly coupled to the version of the Websphere IDE the app was created with. When they need to work on a different app, these guys wait a few days for desktop services to install a different version of Websphere IDE on their desktop. Can you freaking imagine? I hope Google gets into the banking business and wipes these guys out.
Mike_Acker
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Mike_Acker,
User Rank: Apprentice
4/19/2013 | 11:54:31 AM
re: Banks Must Ditch Legacy IT
Banks and People need to learn how to AUTHENTICATE transactions is our modern digital society. Paper based procedures from the 1950s do not provide the security needed in our digital environment

this means companies and people learning to use ( e.g. ) PGP signatures . The process isn't difficult -- but you do have to learn to do it . or get hacked.

it doens't make any difference if you use a System/360 or an iPhone the problem is the same: you must learn to identify yourself from a device that is inherrently anonymous.
Andrew Hornback
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Andrew Hornback,
User Rank: Apprentice
4/18/2013 | 2:34:49 AM
re: Banks Must Ditch Legacy IT
I've heard similar arguments, for similar reasons, in the engineering computing realm - people feeling the need to try to replace highly technical applications written in Fortran with the language/flavor of the week. Why doesn't this approach work?

1. The folks that created the original applications are probably no longer with the organization - How many banks still have people on staff from 40 years ago, in the same technical positions that they had at that time? VERY few.
2. How well documented is the original application? If you have to go back and re-engineer an application because of a lack of properly documented code, the sheer manpower and man hour requirement to make that happen is going to turn off a lot of execs with the mindset of "If it's not broke, don't fix it." - but then these are the same folks who might start the project with the organization and not be around by the time the delivery is planned 3-4 years down the road.
3. ROI - why spend millions of dollars overhauling an existing system to replace it with something that does the exact same function? As long as existing hardware systems are supported by the manufacturer or a trusted third-party, there's no impetus to make a move from that standpoint and it creates a cottage industry (if one can call it that) that supports nothing but banking organizations.

Ultimately, it comes down to how much money is going to be made/saved by making the decision to move to a new system - and given the fuzzy math behind a lot of those calculations, once you start getting into the 7 figure range and higher, you'd better have some serious backup for those calculations.

That said, my mantra when I was in the consulting game was that upgrades are inevitable - doing them on your own time is much more cost effective than being forced into them by a system failure. Once a major bank starts having major technical failures, I think you'll see the temperature start to rise for other banking organizations to get going on their own modernization efforts.

Andrew Hornback
InformationWeek Contributor
keitha0000
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keitha0000,
User Rank: Strategist
4/17/2013 | 6:14:45 PM
re: Banks Must Ditch Legacy IT
I have to question the picture that you are painting here. The IT departments of the largest banks are not putting off modernization. They are in fact using a multitude of platforms, each best suited to the task that they are designed to handle. For example, mainframe systems are at the very core of the largest banks, because that platform is the best tool available to manage the highest transaction rates in the world. Now, banks, or any other organization that relies on powerful IT systems at their core, must use the best systems available for specific tasks. Any bank that is using mainframe systems for ALL of its workloads just wouldn't be able to stay in business. That is why most businesses have dumped mainframe use for most purposes. Except one- processes that require tremendous throughput-- like transaction processing. For most other workloads, I would agree- offload as much as you can to cheaper PC-based servers. But only those workloads that make sense...


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